GEOFF BENNETT: Vice President J.D.

Vance announced# yesterday that the federal government would hold## back $259 million in Medicaid funding for# Minnesota over fraud concerns.

The state and## its welfare fraud scandals have become# a target for the Trump administration,## which deployed thousands of immigration# agents to the Twin Cities in recent months.

The vice president spoke in# neighboring Wisconsin today.

J.D.

VANCE, Vice President of the United# States: The job of your government is not## to open your borders and allow fraudsters# to come in and take advantage of you.## The job of your government is to shut# the border and shut off the fraud,## and that's exactly what we're# doing in the Trump administration.

(APPLAUSE) GEOFF BENNETT: Democrats, including# Minnesota Governor Tim Wal.. says the defunding was politically motivated.

GOV.

TIM WALZ (D-MN): The sense of retribution,## no state has experienced this before.

How# does taking and punishing children and elderly## have anything to do with fighting fraud, when# that's not where this issue was taking place?

GEOFF BENNETT: To break this all# down, we're joined now by Matt Sepic,## reporter from Minnesota Public Radio.

Matt, thanks for being with us.

And for folks who might be# confused by some of this,## first, we should explain, where exactly# do these fraud allegations stem from?

MATT SEPIC, Minnesota Public Radio:# Well, they go back several years.

And they really began with a scandal# known here as the Feeding Our Future## fraud.

In that case, dozens of people,# 79 at last count, have been charged.## Most of them have already been convicted# -- and this began -- it became public in## 2022 -- of stealing around $300 million from# taxpayer-funded child nutrition programs.

That investigation has since morphed into# Medicaid fraud.

And that brings us to today.## A former assistant U.S.

attorney who investigated# this case estimated back in December that as much## as $9 billion may have been stolen from# Minnesota's Medicaid program since 2018.

GEOFF BENNETT: So there is something to this.

This $259 million figure, though, put# that in the context of how much money,## Medicaid money, the state gets# from the federal government.

MATT SEPIC: Well, Minnesota gets# about $21 billion in Medicaid funds## every year.

That's according to the latest# figure that we have, which is from 2024.

So this is a not-insignificant chunk of money.# And there remains some confusion over how this## is all going to play out.

Minnesota Medicaid# Director John Connolly said today that the## way this is structured means that the state will# actually owe the federal government $260 million## for the final three months of 2025 and will not# see a future installment for the current quarter,## the first three months of this year,# until this halt on spending is lifted.

GEOFF BENNETT: So who's# affected by these cuts, Matt?

MATT SEPIC: Primarily people who rely on 14# programs that had been flagged previously as## being susceptible to fraud.

These# include autism services for children,## a housing stabilization program that# Governor Walz in fact shut down last## year because there was so much fraud, as well as# things like nonemergency medical transportation,## so reimbursements for someone# driving you to the doctor.

What it doesn't appear to affect at# this point are what we normally think of## as core Medicaid services, such as physician's# visits, checkups, and that sort of thing.

GEOFF BENNETT: So when President Trump, as# he did at the State of the Union address## earlier this week, said that members# of the state's Somali community have## quote -- this is -- these are his words# -- pillaged an estimated $19 billion from## the American taxpayer, what do we know# about the accuracy of a claim like that?

MATT SEPIC: That number is wildly inflated.

The 14 programs that I mentioned# that have been susceptible to fraud,## according to Medicaid officials in the# federal government, the state has spent,## or the federal government has spent about $18# billion on those in total since 2018.

About half## of that -- and this is an estimate -- and it's# important to note that this is only an estimate.

This has not been proven yet, but a top federal# fraud prosecutor who used to work at the Minnesota## U.S.

attorney's office, Joe Thompson, estimated# back in December that about half of that could## be fraudulent.

And that's based on the exponential# growth in taxpayer outlays for those 14 programs.

GEOFF BENNETT: Has the state# done anything to address this## so it can't happen again, this level of fraud?

MATT SEPIC: Well, it's a hot topic# at the legislative session over in## St.

Paul that just got under# way.

Lawmakers, Democrats,## and Republicans are considering a# number of proposals to combat fraud.

One of those is setting up a new inspector# general's office on the state level.

They're## also talking about more site visits to ensure# that Medicaid providers are providing what they## say they are.

State Attorney General Keith# Ellison, a Democrat, is also asking state## lawmakers to pay for fraud prosecutors in his# office specifically to go after Medicaid fraud.

GEOFF BENNETT: Matt Sepic of Minnesota Public# Radio, thanks again for joining us this evening.

MATT SEPIC: You're welcome.